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The Power of Free (aka The Numbers Post #3)

It has been two months since the last “numbers post”. It covered the Valentine’s Day promotion, spike in sales, and subsequent settling out at a very nice level. Here’s a recap of what things looked like at the beginning of May (revenue was about $1500 per week):

The Plan

Mother’s Day happens at the beginning of May (in the US and Canada anyway, I’m afraid I was too busy in April and I missed Mother’s Day in a lot of European countries). I figured it would be the perfect time to do another push.

If there’s something I learned from past experience, is that the more you manage to concentrate any kind of promotion, the more effective it will be. So in preparation for Mother’s Day, I created a new update (with iPad support), a couple of new in-app purchase items (new set of seeds and some fertilizer bundles), and sent out the usual announcement on the Flower Garden mailing list, Facebook page, and Twitter.

The idea sounded really scary at first. After all, I would be giving away my baby for free. Would I lose a lot of money doing that? Would it depreciate the perceived value of Flower Garden? Would it annoy loyal users seeing an app they paid for given away? Fortunately it appears that the answer to those questions was no.

The reason I decided to give Flower Garden away for free was mostly to get it into more people’s hands. I was thinking I would lose some money initially, but then more than make up for it when I turned it back to paid because of all the extra users and word of mouth. There is already a free version with a limited number of pots and seeds, but people are hungry to download paid apps for free.

To add extra impact to this price change, I had Flower Garden featured as the free app for Mother’s Day weekend in Free App Calendar. Unlike other free app web sites, the folks at Free App Calendar are very developer friendly and are not out to take a cut of your profits or charge outrageous fees. It was an absolute pleasure dealing with them.

Mother’s Day

On Saturday May 8th, a few minutes past midnight the day before Mother’s Day, I switched Flower Garden over to free. Now I was committed!

Right away there was a lot of positive reaction around the announcement. Everybody on Twitter and Facebook were responding really well and spreading the word. Major sites like Touch Arcade and 148Apps covered the Mother’s Day promotion and got lots of extra eyeballs on the sale.

After the first day, the data was in: Flower Garden had been downloaded 12,500 times. That was great! As a reference, Flower Garden Free was usually downloaded between 800 and 1,000 times per day, so that was a 10x improvement.

On Sunday, Mother’s Day, things got even better. News had time to propagate more, and people were sending bouquets like crazy, so by the end of the day there had been an additional 26,000 downloads. That’s exactly what I was hoping for!

As a matter of fact, it was doing so great, that I decided to leave it for free as long as the number of downloads was significantly higher than what the free version was normally getting. After Mother’s Day downloads started going down, but they were still pretty strong the following Sunday. Here’s what the download numbers looked like for those 9 days:

The important question is how much revenue was there during that time? I was giving the app away for free but it had in-app purchases. Would they make up for it? The answer was a resounding yes!

Mother’s Day went on to become the biggest day in terms of revenue since Flower Garden was launched. Bigger even than Christmas or Valentine’s Day! Things started going down after that, but still at a very high level. The little bump towards the end of the week is a combination of the weekend (which always results in more sales), and the feature of Flower Garden on the App Store across most of Europe.

These numbers took a bit to sink in. It really shows that in-app purchases are definitely tied to the number of downloads. If you manage to give away twice as many copies, you’ll probably get close to twice as many in-app purchases. That effect is amplified if you have multiple in-app purchase items available.

It’s also interesting to notice that revenue didn’t follow the same drop-off curve as downloads. It wasn’t nearly as sharp. I suspect two things are going on in there:

Some users downloaded Flower Garden during the sale weekend and weren’t interested in it at all. Downloading it was a knee-jerk reaction to any app that goes free, so that never translated into an in-app purchase. Users later in the week however, probably downloaded it because they received a bouquet or were interested in it, so they had a much higher likelihood of buying something through the Flower Shop.

Fertilizer. Fertilizer is the only consumable item available for purchase in Flower Garden. Unlike a non-consumable item, the number of sales is not tied to the number of new users, but to the number of current, daily users. The more users launch your app every day, the higher the sales of consumable items. Some of the new users of Flower Garden went on to buy fertilizer later in the week, making revenue higher than you would expect from the download curve.

Flipping The Switch

The number of downloads on Sunday May 16th was slightly over 2,000. At that point I decided that it was close enough to the number of downloads Flower Garden Free was normally getting, so I flipped the switch back to paid. Things were going great, so messing with it was a pretty scary thing to do. Even scarier than it had been setting it free in the first place.

During that week, Flower Garden rose up on the charts. It reached #73 in the top games in the US and was charting very high in all the subcategories and on the iPad charts. As soon as I flipped the switch back to paid, it dropped out of sight from the charts. Fortunately, within a couple of days it came back to its position before that crazy week.

Most importantly, Flower Garden Free, which had dropped quite a bit during that promotion, immediately went back up to the top 100 in the Kids and Family subcategories like before.

As you can expect, as a result of giving it away for free, the ratings on the App Store went down quite a bit. While it was a paid application, the ratings were around 4 stars, but they dropped down to 2.5 stars after that week. It seems people love a free app, but are very quick to criticize it and give it a low rating (especially if it has in-app purchases).

Aftermath

Now it’s two months later and the dust has had a chance to settle down. Apart from the very nice sales spike during the sale, was it worth it? Again, the answer is a definite yes.

Here’s the revenue since the start of the promotion:

As you can see, it quickly went down, but it settled at a reasonably high level. In fact, compare this two-month period (highlighted in blue) with the previous sales:

Before the promotion revenue was hovering around $1,500 per week, now it settled down to about $2,400 per week. An average day today is bigger than Christmas day! Very nice change!

I think the reason why it settled at a higher revenue level than before is because it got more exposure during that week. Lots of people sent bouquets, which introduced new users to Flower Garden. It’s the viral effect I was hoping for from the start, and although it never reached epidemic proportions, it has been enough to keep Flower Garden alive and well.

Adding iPad support as part of the latest update probably helped too. The iPad market is smaller than the iPhone one, but a lot of early adopters are eager to find good apps for their new toys. The smaller market size also allowed Flower Garden to appear in the iPad charts more easily, increasing exposure that way.

Here’s a breakdown of where revenue came from in the last month (I’m excluding the period where Flower Garden was free to get a more accurate view):

As you can see, consumable items (fertilizer) account for almost half the revenue. Consumable items are a factor of your current userbase, so getting a large influx of new users can result in a permanent revenue increase instead of just a sales spike. It also shows what a small percentage actual app sales are, which explains why even while Flower Garden was free, revenue was still up.

Conclusion

This was a wild ride again! It was definitely worth doing the promotion and it definitely brought home how powerful free can be. However, I’m trying to decide the pricing scheme for my next game, and even though free plus in-app purchases is very tempting, I’m not sure it’s the way to go.

What do you think? Are new games better off being free with in-app purchases, or can indie games be successful being paid (and still having in-app purchases)?

This post is part of iDevBlogADay, a group of indie iPhone development blogs featuring two posts per day. You can keep up with iDevBlogADay through the web site, RSS feed, or Twitter.

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At the moment, I’m in the process of struggling with the exact dilemma you pose in the last paragraph. Clearly it depends on the game itself of course, but it seems that the boost you can get from the perception of a paid game being made available for free might just swing it. Maybe 😉

Either way, I’d be really happy with the numbers you’re showing – congratulations!

Great post. It’s good to see that the free promotion worked out for you. And the fact that revenue shifted up after the sale is interesting. It definitely shows the importance of getting your product out there, especially if you have in-app purchases.

I definitely think that free+IAP is an incredibly strong model for apps that fit it (and Flower Garden seems like one of the best fits).

I think sometimes people forget that a lot of people WANT to spend more money, and IAP lets them. There are games out there I would spend much more than $1-$3 on if I could get more enjoyment from them. I bought all 5 IAPs for Ramp Champ for example, and if they released 20 more I’d buy all of them and be ECSTATIC about it. The IAP model allows people who WANT to spend more money to do so, without having to raise the price of the app and shut out the people who just want to spend 0.99 or 1.99.

As for free+IAP vs. paid+IAP, the big factor is how much the average consumer can spend on IAP stuff, obviously games with lots of consumable ammo or fertilizer have the potential to spend a lot more long-term than apps that have a ceiling on how much the consumer can spend (like a game with 1 extra level pack available).

Thanks for sharing this data, Noel, and congratulations on the continued sales growth!

My .02 on free+IAP as a user is that it’s great when I don’t feel bait-and-switched. I *love* Landformer, and I was happy to purchase the 50-level pack, but I have to say that my first reaction after playing through the ten beginner levels in a couple minutes was to feel a misled by the “free” appellation. If your “free” app is really a tiny demo with the lion’s share of content/features behind an IAP, just be forthright about it in your app video/website copy/tweets, etc.

Great post. As an indie developer, it’s so useful to see data like this.

I’m really confused as to how I should price my next game. It seems there are so many options to consider in the app store today… Paid, free, free with advertising, in-app purchases, and whether to have a lite version (which can of course cannibalise sales of the paid version)

I agree with Andrew that it depends somewhat on the game being marketed. However, as you’ve shown here, there’s huge potential in a drop to free.

I’ve personally never bought a full game after downloading the trial (it always seems like the taster is plenty) and i’ve never purchased anything through in-app purchases. I have however bought lots of games/apps. I guess I like the traditional model. Also there’s definitely an increased perception of value when you’re paying for something (hence the higher star ratings I guess)

How did your ratings do? I have a non-game app (http://badnewsrobot.com) that had in-app purchases before Apple would allow free apps to have them. The day Apple changed the rule, I made it free and my uploads skyrocketed. I also noticed my Google Alerts lit up because some sites picked up on the price drop. But the 1-star reviews also poured in. Maybe my app really is crap, but most people dig it. 🙂

“As you can expect, as a result of giving it away for free, the ratings on the App Store went down quite a bit. While it was a paid application, the ratings were around 4 stars, but they dropped down to 2.5 stars after that week. It seems people love a free app, but are very quick to criticize it and give it a low rating (especially if it has in-app purchases).”

I don’t have an answer to your question, but just wanted to say thanks a lot for these posts. For those of us on the outside, it’s really awesome to see how these things might work behind the curtain, so to speak.

For my next game, I am going to try the “Freemium” model; I think that giving away an app that is fun and does have a decent amount of game play along with an IAP would result in better revenues. I am interested to test it out.

Full disclosure, I am the founder of freeAppCalendar.com, the site that featured Flower Garden for Noel.

If you plan to go free permanently, an effective method is to release at $0.99 or $1.99 for a few days, and then switch to free on your promo day on freeAppCalendar.com. People would rather get something for free that used cost money than if you give it to them for free right away.

If you are planning on doing a “free day” or know anyone that is, get in touch with me at ken@mindjuice.net. I’d be happy to work with you on promoting your game.

While we do continue to offer a free service where your app goes into a voting pool in order to get selected, we also offer a Flex Feature service which you can read about on the Developers page of http://www.freeAppCalendar.com. There is also information there on some of the better ways to take advantage of your free day.

Cheers!

Shane

Congrats on the great success of Flower Garden! I know it hasn’t been without enormous effort put forward on your part. I think you do a great job within the app of putting IAP upfront and very visible. For example, the Flower Store is a first class citizen right there on the tab bar. Also, continuing to show fertilizer when the user is out so that they get a friendly nudge to go get more when they go to use it.

I’ve added IAP to my app and have seen only moderate success. Certainly nowhere near 70% of my sales. But, 1) I have no consumables and 2) IAP is tucked away and probably way too difficult to find. Based on your success I plan to elevate the IAP visibility in my app.

As with many things AppStore, it’s not just one thing but how each and every piece of an app/marketing plan/etc fit together. For instance, would the free run have been as successful without IAP already being well established within your app? What if you had no consumables? All stuff to ponder when planning out your AppStore take over 🙂

Thanks Noel for the great post.
I’ve been reading your posts and am encouraged by you.
I am a developer who develops non-game app.
The idea of IAP with consumables is so attracting but sadly it is difficult to implement in a non-game app. I wonder if there’s any non-game (say productivity) developer here who has some experience implementing consumable/IAP into their apps?

To be fair, consumables are hard to do right in any app. Even in games, it’s easy to make them seem like you’re taking advantage of the player. But yes, a non-game app makes it harder. The closest thing would be charging for a subscription service every month (to maintain servers or other processing in your part).

The reason I’m wondering what pricing strategy to use for my next project is that it’s going to be very different from Flower Garden. Besides, Flower Garden stumbled into this free + paid + IAP strategy because of what was available at the time.

I know I definitely want to do IAPs, but I’m not sure whether to go only with a free version (like LandFormer), or a paid version with IAPs and a lite (demo) version, or do just like Flower Garden and do paid + IAP and free + IAP (which would shoot my chances to getting on the top charts). So many choices…